Tuesday, September 6, 2011

Minimum Wage Foolishness

The vast majority of people agree with the idea that people should be paid enough live on. I totally agree. It's just the greedy corporations who want to pay people what their services would be worth in an open exchange of cash for services. People just can't survive on that and it's the responsibility of the job providers to make sure that they compensate people enough so that they can have a "living wage."

**In retrospect perhaps I should have posted a giant flashing light with a sarcasm warning.

No matter that without this mandate an employer could hire an average of 10% more people for every person they do hire if they paid the actual value of the services provided. No matter that minimum price controls are shown to negatively effect an entire market segment when instituted. Nevermind that producers forced to pay a minimum wage hire fewer people pass higher costs to their customers and offer fewer benefits to the workers they hire. Finally don't worry that most economists agree that using a minimum wage to help part of a segment of population ultimately hurts more of that segment than it helps. How can that be?

The largest percentage of people who actually earn the minimum wage are young minorities. Employment rates specifically amongst this population segment have dropped following EVERY increase in the minimum wage and have not risen to the level of the highest rate of employment under the previous lower wage mandate. So, the more the minimum wage is increased the HIGHER unemployment for young minorities increases, and while the rate may come down, it does not reach the previous lows.

For more interesting reading on this subject, I would recommend the works of Walter Williams, a best-selling author and economist.